Who could ever imagine video games pushing real-world fashion? More importantly, by partnering with a brand associated with urban cool, "True Crime" earned a street credibility it wouldn't have received if Kang was outfitted in say, Old Navy.

Electronic Arts, for example, brought in $7 million in revenue through in-game advertising last year, a 50 percent increase from the year before.

Chad Stoller is director of communications solutions at the Arnell Group, an ad agency that made waves last year representing DaimlerChrysler’s in-game advertising debut. "We're in the third generation of advertising," he said. "First it was we need to have a brand in the game to make it realistic. Then it was: 'You have a drink to sell? We'll throw in a soda machine.' Now advertisers are asking, ‘How can we integrate our product into the game?’"

An increasingly popular role for some products, according to Stoller, is sponsored levels. "It doesn’t interfere with the flow of the game," said Stoller. "The publisher is saying, ‘OK, you have finished the game, now try this free level.’"

"Need for Speed Underground 2" by Electronic Arts made headlines for becoming the first video game to involve a bidding war between potential advertisers. A sponsored package by Chrysler included an unlockable race track laden with Chrysler advertising and an additional game storyline that involved a Dodge Viper.

Certain games in the Electronic Arts catalog, such as "The Lord of the Rings" and the "Harry Potter" series are completely off limits to advertising.

If there's anyone aware of the "sanctity" of uninterrupted game play, it's the studios that make them.